IQx.com – Colleges Information Online

Tag: financial aid

  • Obama Meets With Family – College Costs

    “President Obama met with a family struggling to afford the cost of college and released a new analysis of the impact of his plans to increase student aid. He will take on the special interests to eliminate wasteful and unreliable guaranteed student loans and invest more in helping students succeed in college and complete their degree. And he will make a historic investment in college affordability: together, the American Recovery and Reinvestment Act (ARRA) and the President’s Budget provide about $200 billion in Pell Grant scholarships and tax credits over the next decade.

    • Reforming Student Loans: The guaranteed student loan program pays banks and other lenders a guaranteed rate of return and reimburses them for defaults, giving them large profits set by the political process rather than won in a competitive marketplace. The Obama-Biden Administration will expand the alternative Direct Loan program, which is administered by private sector companies selected through a competitive process and paid based upon performance. Direct loans have essentially the same terms for students and are more reliable and efficient. They will save $48 billion over the next decade according to the Office of Management and Budget, which will be reinvested in Pell Grant scholarships for students.
    • Restoring Pell Grants to a Strong Foundation for Student Aid: The value of Pell Grants have fallen from 77 percent of the cost of attending a public university to 33 percent over the past three decades. The ARRA invested $17 billion, making it possible to increase Pell by $619 for 7 million students. But these funding increases are only temporary, and without additional resources the value of the maximum Pell Grant will fall by $1,400 in 2011. President Obama is committed to a strong, reliable Pell Grant program. He will make Pell an entitlement, provide $116 billion over the next decade to prevent any drop in the size of Pell Grants, ensure that they continues to grow faster than inflation, and eliminate the frequent budget shortfalls that have plagued the program.
    • Cut Taxes on College Tuition: The ARRA created the American Opportunity Tax Credit, which will give millions of families up to $2,500 each to help pay for college. The credit was also expanded to help families too poor to owe income taxes. But the credit expires at the end of 2010. The President’s Budget would make it permanent.
    • Make a New Commitment to College Access and Completion: Only 65 percent of students starting at four-year colleges – and 38 percent of students starting at two-year colleges – earn a degree within six years. The President’s Budget includes a five-year, $2.5 billion fund to improve college access and help America’s colleges and universities graduate more students. The fund will identify, test, and promote what works in boosting college enrollment and persistence. “

    Taken from whitehouse.gov

  • Financial Aid – Premier Schools

    Stanford’s announcement came two months after Harvard publicized its expensive new financial aid policies and over a month after Yale and Dartmouth followed suit with their own. Since Harvard’s announcement in December (at which time it saw its application rate spike by 19 percent), other top ranked schools including Williams, Princeton, Swarthmore, Cornell, Northwestern, University of Pennsylvania, Bowdoin, Pomona, Cal Tech, Duke and Davidson have announced new financial aid policies in what some people consider an effort to “keep up with the Harvard’s.”

    Similar to Harvard and many other elite universities, on February 20, Stanford University announced a new financial aid policy dramatically increasing the eligible amount of aid for middle-income families. The announcement comes as the latest in a series of policy revisions over the past three years designed to ease the burden of paying a tuition averaging $47,000 a year and to ensure that no high school student considering applying to Stanford decides not to because of cost.

    In addition, the plan also calls for eliminating student loans. All students qualifying for need-based financial aid no longer need to take out the expected $4,000 loan before receiving money from the scholarship fund. Beginning in the 2008-09 school year, students are only expected to earn $2,500 from working during the school year and earn approximately $2,000 over the summer.

    Each fall, the financial aid program is reevaluated by the Financial Aid Office, the Dean of Admission and Financial Aid, the Budget Office, the Provost, and the President, with consultation from the Board of Trustees. Cooper added, “There are no specific plans in the works for more changes at this time. We will be evaluating the success of our current changes next fall.”

    The changes were made possible through an increase in the endowment payout and doubling the financial goal of the Stanford Challenge, an effort to increase fundraising for the university, to $200 million. The Board of Trustees approved the increase in endowment payout from 5% to 5.5%, or by $160 million, on June 14, 2007, at the time intending to fund capital improvement projects.

    The announcement follows the House of Representative’s passing of the College Opportunity and Affordability Act, which aims to expose the allegedly corrupt relationship between expensive colleges and loan agencies and give greater transparency to the consumer. The Senate has put forth its own version of the bill. If passed, the law would require colleges to report financial information that Stanford University officials claim to be unproductive and difficult, namely revealing the rate of their endowment spending.

    Many people believe Stanford’s increase in endowment spending on financial aid from five to 5.5 percent this year is aimed to counteract the repealed provision of the College Opportunity and Affordability Act that would have required colleges to spend at least five percent of their endowment on financial aid. But the Board of Trustees approved the increase in endowment payout in June, nearly five months before the act’s proposal. As far back as 2003, Republicans had been discussing a bill that would penalize colleges that raised tuition significantly faster than inflation.

    These policy revisions have also coincided with and followed those of other top ranked schools. In 2006, Stanford eliminated educational costs for families earning less than $45,000. Harvard had enacted a similar policy in 2004 and Yale in 2005.

  • How will schools help fund families?

    How exactly do all the schools start to help poor families, or even middle class?

    Harvard took the lead. Two years ago, Harvard implemented a policy in which students whose parents earn a $60,000 or less no longer pay for tuition or room and board. Stanford has just adopted the same policy, adding that students whose parents earn $100,000 must only pay room and board. Stanford Financial Aid has not provided a formula for evaluating aid for students who come from families with income over $100,000.

    Princeton has taken a similar approach in which it evaluates aid on a case by case basis rather than the more formulaic sliding scales that Yale and Harvard have decided to use. At Stanford and Princeton, students in the income bracket range between $60,000-100,000 can expect to pay $11,000 or less, approximately the cost of room and board.

    But at Harvard and Yale, students in the income range $60,000-120,000 can expect only to pay on a sliding scale between 1 and 10% of their income ($600-12,000), which is significantly less than students at Stanford. Students at Harvard and Yale from income brackets between $120,000 and $180,000 can expect to pay between $12,000-18,000. Cooper has refused to make comparisons between higher income students at Stanford and Harvard, saying she does not want to mislead them about their potential aid package. She cautioned that aid will be evaluated on an individual basis with a number of factors including home equity, other siblings in college, and cost of living taken into account.

    The new financial aid policy isolates the upper-middle class. Universities are increasing tuition fees for students who do not receive financial aid. It is called “Take from the Rich and Give to the Poor”. While the financial aid policies have made it less expensive than some state schools for students from households less than $100,000, colleges generally remains much more expensive for students from households with income well over $100,000. State schools also usually offer merit aid, which can often significantly decrease the expense for top students.

  • College Bills in this Economy

    With the economic downturn, how will you pay for the college bill?

    It could be either merit aid from the school or a simple federal financial aid. If you think your income is too high, you may not qualify the school’s aid. Of course you may fill out the federal application for financial aid, known as FAFSA. You may check the colleges’ websites to see whether there are additional requirements for merit aid; some scholarships require a separate application that may have an early deadline.

    You can use the 529 college savings plan to pay for the bill of a high school junior or senior has dropped 12.5% in value over the past year. Is your 529 in cash or stocks? If it is in stocks, with the stock market like today, it will not do much. If it is in cash, it depends on when you sold the stock and convert it to cash. If you sold at the low with panic selling, since most of the money in your 529 in cash or other fixed-income investments by now, a big surge in stocks won’t help you much.

    Could using 529 funds early hurt your chances of getting financial help later? Although withdrawals used to be treated as income, which is counted more heavily in financial aid formulas than savings, that’s no longer the case.

    You can get a home equity loan (if you home did not have the problem of the recent collapse in home values). You could borrow at a lower rate than for federal or private college loans, and the interest expense was often fully deductible. But many banks have frozen home-equity lines of credit, even for people with a good credit score. While the credit crunch threatened the availability of college loans last year, you’ll have no problems now, thanks to swift action by Congress to keep the federal money flowing. And while the rates aren’t as cheap as on a HELOC, they’re reasonable. The best deals are on loans made directly to students. Freshmen can take out up to $5,500 in Stafford loans this year (the limit rises to $7,500 for seniors), and the top rate is 6.8%. If you need to borrow more, getting a federal loan for parents, called a PLUS, is a snap. Just about anyone with a halfway decent credit history can get one and borrow up to the full cost of attendance, minus any aid received, at a maximum 8.5% rate.

    The recently passed economic stimulus legislation included a welcome provision for tuition-paying parents: an expansion of the Hope Credit for educational expenses — now called the American Opportunity Tax Credit — to $2,500, from $1,500. It will be available for the 2009 and 2010 tax years. Unlike the Hope, which could be used only for expenses in the first two years of college, this new credit can be claimed for costs over four years. And more middle- and upper-middle-income families will qualify; if you make $180,000 or less ($90,000 for singles), you’ll get at least a partial credit. (The Hope phased out if you earned more than $120,000.) You can even claim the credit if you fall under the alternative minimum tax.

    There are other breaks available, like the Lifetime Learning credit (up to $2,000) and a tuition deduction of up to $4,000. But you can claim only one tax break per child each year, and the American Opportunity is the best of the bunch. One other benefit you may be entitled to: You can deduct all or part of the interest you pay on college loans, up to $2,500, if you make $150,000 or less ($75,000 for singles). Finally, the new rules from Washington also expanded the kind of bills you can pay from a 529 account to include computers and related equipment if it’s required by the college, as well as Internet access.

  • College Myths (Third)

    This is third of the IQx college myth list.

    IQx Myth #11 – The duration of college is only four years.
    This is wrong for two reasons: 1 – A student can’t trade in his/her degree for another one if he/she didn’t go to the best college for his/her first time. The college is with the student for life. 2 – About one out of five students completes college in four years. In fact, only two of five students complete college in six years. If a student plans to be out of college in four years, learn what each college’s four-year graduation rate is.

    IQx Myth #12 – A student has to take only the minimum college prep courses to get into college.
    Technically, this is true. In reality however, it is not. The more science, mathematics and languages a student takes, the better his/her chances are for getting into a good four-year college.

    IQx Myth #13 – State institutions provide more financial aid than private universities.
    State-supported colleges offer less of their own resources for scholarships and financial aid. State-supported institutions are subsidized by their respective states which allows them to charge less. However, state institutions are also more likely to only offer loans to students who do not have a high need.

    IQx Myth #14 – Students can’t trust the college about financial aid.
    The job of a university’s financial aid officer is to make it possible for all admitted students to attend their college while still staying within the federal guidelines. Their job is to make the financial aid package fit different students as well as possible.

    IQx Myth #15 – A student’s life will be ruined if he/she doesn’t get admitted to his/her first choice college.
    Thousands upon thousands of students each year do not get admitted to their first choice college. They are still here today as happy and healthy as the rest of us. Rejection is always hard on egos, but lots of others are experiencing the same. It’s a part of life. Many go on to have a great time at their second choice school and go further to have a great career.

  • College Myths (Second)

    This is second of the IQx college myth list.

    IQx Myth #6 – If a student hasn’t heard of a college or university, it can’t be a good one.
    A student may not hear about many of the world’s most prestigious colleges until he/she is in his/her senior year of high school. Most universities that are broadcasted nationwide are displayed through sports. However, many of the best colleges may not be amazing at athletics and don’t get the chance to get extremely well known. Look at colleges for their merits, not for their name.

    IQx Myth #7 – A student should decide on his/her career before he/she can choose a university.
    In most colleges, a student can choose his/her major in his/her sophomore year and still complete the degree in four years. A surprising number of students discover their ideal field while taking a course they didn’t expect to like. Take the time to decide.

    IQx Myth #8 – The best time to visit colleges is after the student has been admitted.
    This is absolutely vital to the student’s happiness in his/her college. Students should visit every school that they want to attend before applying. This will determine whether they enjoy the campus and general feel of the particular university. Many students have visited after they were accepted and found that none of the colleges were ones that they would fit into.

    IQx Myth #9 – Large universities have greater ethnic diversity.
    If the value of diversity is to learn to understand and appreciate other cultures and groups, then small colleges often offer greater diversity. However, the ratios of the different ethnic groups are generally within 1-2% from college to college.

    IQx Myth #10 – Only the highest achieving students receive financial aid from colleges.
    Many students are accepted to a college, but they need financial aid. Although another student may have a better transcript, financial aid is generally saved for those who need it. There are more need based scholarships than academic or athletic based scholarships.

  • Best Valued School

    Which school has the best value? Value is what you got for what you had paid. It is about spending less money and getting more than you paid. The more grants the school provides to you, the better value to you. You can always borrow money, but that does not lead you to a better value. This is especially important during current recession.

    The No. 1 Best Value for public schools is the University of Virginia. This year’s tuition, fees, room and board totaled $18,499 for in-state students and $37,749 out of state. The average grant UVA offered (including scholarships) totaled $9,531. The average 2008 graduate’s debt was $16,847. At top-rated private college Swarthmore, with 1,480 undergraduates for the 2008-09 year, the total cost is $47,804 (with large portion $36,154 — for tuition). But the average grant is $30,073, this is very attractive. The school did not report the amount of student debt, but at each of the top two campuses, about 70% of students graduated debt-free in 2008.

    The Princeton Review’s aim was to determine the average annual cost that a freshman paid for the 2008-09 school year. The selection criteria looked at academics, costs and financial aid, using the most recently reported data from each institution for its 2008-09 academic year. Overall selection criteria included more than 30 factors in three areas: academics, costs and financial aid. Academic ratings were based on student surveys about such issues as professors’ accessibility and class sizes, as well as institutional reports about student-faculty ratios and percent of classes taught by teaching assistants. The financial aid rating is based on a combination of school-reported data and student surveys. Tuition, room and board, and required fees, as well as book costs and other factors, are included in the financial measurement.

    The TOP 10 best value schools from Princeton Review are listed below.

    PRIVATE School;

    1. Swarthmore College (Swarthmore, Pa.)
    2. Harvard College (Cambridge, Mass.)
    3. Princeton University (Princeton, N.J.)
    4. Rice University (Houston, Texas)
    5. Yale University (New Haven, Conn.)
    6. Williams College (Williamstown, Mass.)
    7. Amherst College (Amherst, Mass.)
    8. California Institute of Technology (Pasadena)
    9. Pomona College (Claremont, Calif.)
    10. Stanford University (Stanford, Calif.)

    PUBLIC School

    1. University of Virginia (Charlottesville)
    2. New College of Florida (Sarasota)
    3. College of William & Mary (Williamsburg, Va.)
    4. State University of New York-Binghamton
    5. Florida State University (Tallahassee)
    6. North Carolina State University (Raleigh)
    7. University of California San Diego
    8. City University of New York — Hunter College (New York, N.Y.)
    9. University of Georgia (Athens)
    10. The College of New Jersey (Ewing)

  • College Scholarships

    College scholarships are one of the biggest factors when determining which university a person chooses to attend. This is because nearly every student needs financial aid these days with the economy so bad and tuition so high. A lot of the time, a brilliant student will be accepted by Harvard, Yale, Princeton, UC Berkeley, and many other great schools. Unfortunately, this student probably will choose to go to a lesser ranked college just for the money. Most people get partial scholarships. For example: 45% of a full four years paid for. Only very few get a full scholarship (full ride). There are many ways to obtain a scholarship. Some of these include sports, SAT scores, grades, music, national competitions, and other extra curricular activities. The most common way to get a full ride is by sports.